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go enjoy it and take something off the table if you have to. there's always i bull market somewhere. i promise to find it just for you. i'm jim cramer. see you monday. has football amnesia? is it geithner or the wall street ebanks? can stocks trump oil? right now i believe they can. good evening. i'm larry kudlow. this is "the kudlow report." sizzle story number one, in nine months the u.s. economy could go over a massive fiscal cliff. that's bernanke's warning to congress, and who has the real amnesia on bank reform? is it wall street, or is it mr. geithner? sizzle number two, can stocks trump oil? i say yes, they can. unless mr. obama doesn't get our iran policy right. obama meets with israeli prime minister netanyahu on monday. and four days to go until super tuesday. has the improving economy already decided the election in obama's favor? pundits say yes. i think not.
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let's get right to our top story tonight. the dire warning from fed head ben bernanke this week. he told congress that our economy faces a perfect storm at the end of the year threatening our prospects for growth and recovery. take a listen. >> under current law on january 1st, 2013 there's going to be a massive fiscal cliff of large spending cuts and tax increases. i hope that congress will look at that and figure out ways to achieve the same long run fiscal improvement without having it all happen at one date. >> all right. so as the country's debt and spending continues to skyrocket, my question tonight really are we heading for this fiscal cliff come january? you have jillian epstein, foreign chief minority council to the house committee. american enterprise institute, and hit-or-miss member dave sweichert, republican from arizona. this was a bernanke warning that didn't get near enough attention, and i want to ask
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you, he is talking about a massive, what, $3 trillion, $4 trillion tax hike scheduled for january 1st, 2013. he is also worried, wrongly, i think, about spending cuts of over $1 trillion. what's this fiscal cliff all about, and how is it going to affect the economy? >> well, you know, i'm not so worried about the spending cuts. like you, i'm worried about these massive tax increases. and given the state of the economy, if we let all these tax increases go through, i have little doubt that will push us back into a recession. perhaps a severe one. goldman sachs did a great study on the 569 of letting all the bush tax cuts expire, and maybe president obama would like it to happen, and it could happen, and they found that it would knock 3% to 4% points off of gdp, even assuming, even assuming, the fed cut interest rates dramatically, which now they can't do. they're already at zero, which means you're going to full the full effect of that tax increase. it would be terrible for growth and terrible for the economy. >> all right. so julian epstein, if we're headed for recession, let's take
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goldman's numbers. you take three percentage points off gdp, and it's only growing at 3%, maybe less. what do you do? this is bernanke's fiscal cliff. this was an important warning, but i don't know if anybody is paying attention to it, and i'm not sure congress has a plan for it. >> let's answer your question a little more directly. he was not speaking about the bush tax cuts. he was speaking about sequestration. i think sequestration will never occur for the following reasons. >> no, he was talking about both. >> i think -- >> he has talked about the rolling back all the bush tax cuts and the super committee's cut of $1 trillion. >> 1.2 sequestration. i don't think it's going to happen for the following reason. you look at 1985 1k3 1991, the last time we had these big budget deals. you had strong enforcement provisions. you don't have any enforcement provision in the sequestration deal. it's very easy for congress with one line to just wipe it off, which i think it should do. i think it's -- i think it's a good idea if it doesn't do sequestration. i'm not even crazy about repeeling the bush tax cuts, as i told you before, until we get an economy that's pumping at 3%,
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4% a year. in terms of the spending cuts, i think europe is showing us that immediate short-term austerity programs are not a good recipe for economic growth. we need to do serious spending cuts. in a decade from now we will be looking at entitlements taking 70% much the federal budget. >> all are bad for -- >> let me make a point. >> let me finish the point if i can. >> hang on i second. i want to bring in congressman dave, who is probably itching to go. >> oh, yeah. >> you have two pieces here. i mean, bernanke is an odd warning. it's a casesian warning. he is saying don't raise taxes. that's fine. don't cut spending. he looks at things the same. now, dave, you heard this, congress heard this, what does it mean because it doesn't look like any action is going to take place on the budget, and we will hit the fiscal cliff. >> larry, i was actually in that financial services committee hearing when bernanke was speaking. there's no reason the tax policy would be this draconian hitting at the end of the year. when you think about it, if we
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did that, would we push by policy push ourselves into a recession? >> well, wait a minute. what about the uncertainty that's associated with this? >> that's actually brilliant, larry. >> you're an entrepreneur. you see this coming. you're reading the newspapers. this weekend, for example, you might be reading the "wall street journal" weekend edition, and you're going to look at what bernanke said, and then scratch your head and say wait a minute, we're all going to hell in a handbag. that's really the issue that troubles me about today's economy, much less january 1st, 2013. >> that's actually one of the great sins in congress is we're not providing the level of visibility for tax policy, fiscal policy. at the same time we all know we have a debt crisis coming with the baby boom population retiring. if we would step up, show that visibility what tax policy is going to look like in the future, maybe our organizations and our businesses out there could start to invest. >> i have a suggestion for the congressman. >> the scary thing here -- >> i think the smart thing for -- >> obama called the escape artist looking at the
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administration, and what is determined that the president isn't scared of the tax hikes. back in 2009 he considered, what, all the bush tax hikes expire. why? because it's now the new liberal economic consensus that higher tax rates don't matter. i think there's a good chance that obama lets all these bush tax cuts expire in december 2012 and takes his chances after that. >> let me take the congressman out on a simple point here. i mean, i think we can have a debate about the bush tax cuts, and i think the jury is out. the data is, in fact, not that strong that if you were to let them to expire, that it would shave a couple of points off gdp. that's a fair debate. i think the jury is very out now, and i don't think the evidence is strong. >> you say don't have any evidence. cbo, goldman sachs, every bank. i have all kinds of evidence. >> jimmy, you might learn something if you let other people talk instead of shouting at others. >> i'm not making it up. >> i think that there's overwhelming evidence that if you have sequestration of 1.2 trillion dollars next january, that that will definitely --
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>> first off, you have a math problem. >> okay, first off, larry -- larry, we're right there. it's over ten years. i mean, you got a math problem. it's over ten years. >> so it's really not -- >> yes, it is. and the tax cuts happen on a single day. the expiration of the tax cuts happen on a single day. >> that's an important point. hang, on julian. let me pursue this point. you are saying the spending cuts are over ten years, but the tax hike goes into play all at once. >> exactly. >> really the big threat is not fiscal withdrawal. the big -- from the spending cuts. the big threat is the tax hike that's going to be up there. >> which is illusionary. which is wrong. it's just wrong. >> why is it wrong? >> because you get major cuts that occur in discretionary spending in the early years. there's no enforcement provision for entitle mtsdz in the out years. there's no guarantee thaw get any of those cuts. it's really a mirage that the congress passed.
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the point is this, 70% of federal spending will be entitlements within the next decade. unless you have serious fundamental structural reform and what sequestration offers. >> it doesn't have a long-term entitlement plan. tim geithner went for the house budget committee and said, guess what, we don't have a plan or we don't like your plan, but we don't have a plan, and, by the way, our budget does nothing over ten years other than leave 80% gdp dead. >> speaking about amnesia, jimmy has basic amnesia from what the deficit commission proposed, much of which the obama white house has raised. he has -- >> the one he rejected? that one? >> about the entitlement reforms he suggested. obama has been out in front on entitlement reforms. >> can you hand me obama's entitlement reform plan? could you hand me obama's entitlement long-term reform plan? >> i'm sorry. i wasn't sure who was speaking, but someone is living in a fantasy world. >> that would be julian. >> we're literally four budget years away from being in the 1970s, and actually the mid 1970s of medicare and medicaid,
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social security, interest under the veterans benefits consuming the vast majority of this bek budget. we're a decade away from it being everything. >> and the president to have an honest conversation of the debt deal, it's got to be also a conversation about mandatory spending. >> i totally agree with that. >> hang on a second. >> let me switch gears for a second. i want to bet into this geithner story today in the wall street. okay? mr. geithner says those who are posing the bank regulatory reform have financial amnesia. dick and others say, wait a minute, mr. geithner has amnesia because you have the regulatory tools and you have the monetary tools to stop this without stiffling credit creation. jimmy p., i want you to take a whack at that. who has the amnesia? does geithner have the amnesia, or does wall street ebanks have the amnesia, or maybe neither of them do? i don't know. what's your take? >> well, i think tim geithner has a little bit of amnesia because one of the reasons we
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have this tremendous financial crisis is because the too big to fail. banks take risks, and they can be bailed out by uncle sam, and we have the interest rates too low for too long. guess what, we have the dodd-frank reform. we shoved it through. it's tremendously long, and guess what, we're standing here right now. banks are bigger. their economic wealth is more concentrated and too big to fail still exists. big banks have a huge funding advantage over smaller ebanks. that tells you that banks are too big to fail so dodd-frank didn't fix the problem. >> i'm not disagreesing with geithner that some reformers were necessary, although i think they could have done a lot better. the federal reserve completely missed it. they could have regulated the big ebanks and gone after fannie mae and freddie mac. >> how about even the new york fed, larry? >> the new york stead chshgs geithner ran, exactly right. the regulatory policy or monetary policy, things could have been done that geithner didn't get done.
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fannie mae and freddie mac is also involved in this. their credit damage was reduced. all of that was in the past. what do you think will happen to the bank regulatory reform. geithner wants it to stay. do you think congress will change it, or does it just go through, and the regulations debt ge negotiatesed out? >> i don't think we have a choice than to change a number of provisions or rebuild a substantial portion of dodd-frank, and understand, the bill looked very different coming out of the house. it was the senate that put so much -- and forgive my language -- garbage on it that now is causing this barrier to finding capital for economic growth. >> just give you the last word on this, julian. do you think secretary geithner is being too hard-lined? do you think things could be changed, need to be changed? i'm thinking particularly the community financial authority which a lot of small banks oppose? jimmy p.'s point about too big to fail? what do you think?
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what was the intent of his amnesia piece today? >> one of the things geithner talked about this week was, in fact, reforming freddy and fannie, which is something we need to do. the jury is in on the credit default swap abuses and those kinds of abuses needing to be regulated, as you point the out. and i think to jimmy's point, this idea about too big to fail. you know, we have this debate on your show many times about the tarp program, and i think the jury is in both on the tarp rescue plan and the auto rescue plan that they were not only good for those industries, but good for taxpayers. >> i don't want to debate it tonight. i just want to work it in. julian epstein, thank you. jimmy p., congressman, appreciate your time, sir, very much. coming up tonight on "kudlow" can stocks overcome oil? you know, i say yes, they can. you know why? because, look, we have october, never, december, january, february. the reality is oil is up 40%, but the s&p is up 25%. stocks basically, not always, but they have risen despite the oil shock. why can't that continue? don't forget, free market capitalism is the best path to prosperity, but let's solve our
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fiscal shock. pro growth tax reform, not tax hikes. mber the day my doctor told me i have an irregular heartbeat, and that it put me at 5-times greater risk of a stroke. i was worried. i worried about my wife, and my family. bill has the most common type of atrial fibrillation, or afib. it's not caused by a heart valve problem. he was taking warfarin, but i've put him on pradaxa instead. in a clinical trial, pradaxa 150 mgs reduced stroke risk 35% more than warfarin without the need for regular blood tests.
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i sure was glad to hear that. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding, and seek immediate medical care for unexpected signs of bleeding, like unusual bruising. pradaxa may increase your bleeding risk if you're 75 or older, have a bleeding condition like stomach ulcers, or take aspirin, nsaids, or bloodthinners, or if you have kidney problems, especially if you take certain medicines. tell your doctor about all medicines you take, any planned medical or dental procedures, and don't stop taking pradaxa without your doctor's approval, as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. pradaxa is progress. if you have afib not caused by a heart valve problem, ask your doctor if you can reduce your risk of stroke with pradaxa.
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lease do some stock market work now. since october 3rd of last year
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oil up 40%. the s&p up 25%. so, in effect, stocks have trumped oil. at least they've gone up a lot. oil has gone up. i think the reason is profits and the economy are carrying shares higher. oil is not the blockage. the question is it will it continue? let's talk. jim, director at tjm institutional services, dan greenhouse, chief global strategist btig. dan, start with you. i think you're the more pessimistic on the panel. i just want to say they don't march together, but stocks have gone up while oil has gone up. there's no automatic neglectation. where do you come out on this question? >> you know, it really depends on the situation. i think, you know, the important thing to remember with respect to where this conversation is going is that the energy sector is the third largest sector in the s&p 500 behind tech and financials. at least in the initial stages of sort of a demand-led increase
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in the price of oil, it's important to remember that tech and financials are not really affected in a direct fashion by higher oil while energy earnings in theory would improve, so you're talking about three of the largest sectors in the s&p in the initial stages with either being affected or benefitted and that can support higher stock prices. >> i think that's well put. jim, let me go there. i'm assuming, jim that, we don't have a blockage of these strait of hormuz, and the stock price doesn't go to $150 or $200. it looks like the stronger economy in the u.s. and china is really moving oil up, and they are major sectors in the s&p. and how far can this story go? let's say oil goes back to $110 or $115? would you buy or sell stocks on that? >> i wouldn't worry about it at 110 or 115. 12 uft last 14 months crude has traded at least $100. oil prices rallying and stocks being fairly bouyant, they've been living in the same house for quite a long time, but the thing that's even more amazing to me is that there is no question that the economic
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numbers are getting better, not worse currently. even the economy, not just the stock market is living about high oil prices. 110, 115 -- >> i want to say jim is totally right. you can see in sort of the implied volatility in the oil market, it hasn't really spiked. i think jim is exactly right. the different is we might be shifting from a demand led increase into what may be a supply shot-led increase, and that has a different affect entirely. >> no, i think there's no question that both those things are there. >> dan greenhouse, on the supply shock, you're worried about an iranian-related supply shock, as a result? is this other stock you're worried about? >> yeah. i mean, you know, btig we figure if israel bombs iran, you're going to have -- >> well, of course. you could go to $200 a barrel, in which case all bets are off. >> dan, don't you think, though, that there's some of that risk premium that's built in already? we've been talking about iran for quite a few months now. i personally think that, yes, we would get a huge spike in oil when it happened, but it might
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be kind of a buy the rumor, sell the facts sort of thing. i'm not short oil. i don't go short oil because it makes for restless sleep. >> i don't disagree at all, and what we're telling our clients is that in reality it's not necessarily the strike itself that's going to impir risk assets. it's whether or not this leads into a protracted affair. if you have a much longer -- if the duration of conflict goes on for, let's say, a month, two months, three months, four months, then you have a much more negative affect on the investing landscape. >> then it will -- then it will have a negative affect on stocks itself. my whole trading thesis is independent of that sort of big shock, and -- >> you're saying long? >> sure. i'm long. >> dan, are you actually selling the market right now? >> well, i mean, we've been neutral for about 3% or 4% now. i think, you know, something that jim is well aware of that a lot of people are talking about are sort of some of the metrics that are suggesting we're looking a little topee here, whether it's the transports and the russells looking -- and the
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russell looking like they're trading a little lower, the percentage of stocks and the new york stock exchange trading above the 200 day moving average is looking topee. you know, we're in the camp and it has been for many time now, let's just wait and see. we've had a terrific run. >> with all those factors, the one thing that struck me though, dan, is that two days ago the fed gave the stock market a reason to correct, and the stock market completely ignored it. to me that means, wow, maybe we're not as topee as i thought three days ago. that's what one of the things that convinced me to be a little more bullish. >> yeah. this is really interesting, and it's something i'm working on to talk to clients about. you know, again, with respect to this qe3 argument, and i will be -- to be honest, i thought qe3 was a foregone conclusion as recently as, you know, let's say two months ago. bernanke said it maybe won't be as much a foregone conclusion as we thought, and, remember, in an era of improving economic fundamentals, that's a good thing. you want higher interest rates. you want less fed activity. >> it's creeping up. let me ask one final. jim, in your economic scenario, with which i basically agree, i
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mean, i'm an economic optimist right now, but i'm seeing people like my friend doug cass. the isms were soft and personal spending was soft, even though car sales were strong. do you see glitches in that whole economic argument that might upset the stock market apple cart? >> you know that i'm always very cautious, and even now when i say i'm long, i'm mostly long cheap call premium because i don't want to be totally exposed on the down side. yeah, there's been a couple of things that have worried me, particularly that ism number worried me a little bit, but the employment numbers improving is what i think is the best indicator that things -- we're on more solid ground than we had been before. i'll keep watching, you know, for the instance of those anything negative numbers as well. >> we'll leave it there. dan greenhouse, thank you very much. jim, likewise. appreciate you coming on friday night. breaking news coming into cnbc. multiple tornadoes are touching down in indiana as we speak right now. a high school has taken a direct hit. we get the latest details right after the break. i love that my daughter's part fish.
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right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. only hertz gives you a carfirmation. hey. this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. mrult reply tornadoes have touched down in alabama and tennessee. there have been fatalities. scott budman has the latest details on that and the other headlines coming into cnbc. good evening, scott. >> well, good evening, larry. here's what we know so far. tornadoes have touched down in alabama, tennessee, and indiana. at least five people have been killed in southern indiana. an official in that state says
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one town is "completely gone." and that a high school in another town took a direct hit. in other news, citi chairman dick parson is stepping down from the board after 16 years. the citi board is expected to elect former bank of hawaii ceo michael o'neil as chairman. general motors is halting production of the chevy volt for five weeks because of slow sales. 1,300 workers will be temporarily laid off. shares of on-line review site yelp soared 64% today on its first day of trading. connecticut authorities have charged william ryan jennings, morgan stanley's co-head of fixed income capital markets, with a hate crime for allegedly threatening and stabbing a new york city cab driver. the incident happened back in december. jennings says he was held captive by the driver after he disputed the charge for the ride to his connecticut home. chad condit, the son of disgraced former congressman gary condit is reportedly running for congress as an independent near his hometown in rural california.
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finally, tonight the nfl says players with the new orleans saints had a bounty that rewarded players injuring members of the opposing team. $1,500 for a knock-out. $1,000 for a cart-off. bounties are a violation of nfl rules. no word yet if anyone will be held accountable. larry, we'll send it back to you. >> all right, scott. kntv scott budman. coming up on cuddly romney surging in the polls in ohio. gop candidates gearing up for super tuesday, which is four days away. now, some pundits are saying the improving economy has already decided the election for president obama. me? i am totally not in that camp. however, we'll debate former dnc chairman governor howard dean, former gop chairman michael steel. we'll face offer. is the election over? no way. we've hardly begun.
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>> welcome back to the kudlow report. i'm larry kudlow. the republican presidential candidates gear up for the big super tuesday showdown. mitt romney seems to be back from the dead in ohio after a double down digits -- double digits downer before.
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let's go to robert costa of the national review. he has all the primary race stuff. first of all, is romney, in fact, coming back in ohio? >> romney is closing in ohio. he was down double digits, and he is resonating with his message. it's in the rust belt, and there's a lot of chatter among republicans that romney isn't very strong there. he did win in michigan, but he had a home field advantage. ohio is the real test. it's objective. it's close to pennsylvania. santorum's home turf. it's close to michigan, and let's see what romney does there. >> i see -- i hear santorum nagging romney for a sort of confused issue regarding the contraception bill, and the freedom of religion amendment. romney came right back and said, you know, i'm for it. i thought you were talking about a state contraception bill. he would have voted in favor of the republican position. the reason i'm asking is that tells me santorum is still mucking around in these austere culture war issues, and he doesn't get it that the voters want economic growth the way
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romney is presenting it. >> that's true, larry, but there's another chess game going on. santorum is getting a lot of flack from conservatives for calling democrats in michigan, so he is trying to cast himself as the conservative insurgent once again to go against mitt romney's political machine, and that's what he is trying to do with that to make sure that conservatives look at him as their champion, not romney. >> i don't know how you do that, bob costa. in other words, if you just hung up on the cultural issues. everybody thought that was the turn-off. i'm a cultural conservative, but i don't think that's the zitegeist in this primary. >> his advisors are really betting on the culture war still having some resonance, especially in the rust belt, and they think that santorum has to be who he has always been. a fiscal hawk, also a pro-family guy, and that's always been part of his message when he was running in pennsylvania and he is not changing it right now. >> i think newt gingrich -- let me throw that name into the hopper. i think he is saying really great things about unleashing american energy technology. i mean, really creating wealth
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and balancing the budget. now, question, is newt going to win in georgia? can he stay alive through super tuesday? sdmri think he is very much going to be staying alive through super tuesday. it's a fascinating story. while gingrich has been really floating around not part of the discussion for a while, he has been coming out with some interesting ideas. he has had some real energy in his policy proposals, and is he leading by double digits in georgia, and san tore upping is in third place in georgia. if santorum can't win ohio but gingrich is strong in the south, santorum could start to fade, and gingrich could have a resurrection and be the los angeles rhett. >> i really like gingrich's energy growth message, and it solves fiscal problems as well. quite fascinating. robert costa, national review, thank you very much. now, folks, rick santorum apparently blew a double digit leads in michigan. mitt romney snatched victory from the jaws of defeat. at this power polls suggest the same thing could be happening in ohio as mr. costa reported. now, santorum's lead evaporating. is ohio santorum's last stand? well, we're joined by former
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ohio romney backer turned santorum supporter, that being ohio state attorney general and former u.s. senator mike dewine. i'm employing to call you senator dewine, sir, because that's how i knew you in washington d.c. let me just get down to it. you switched from romney to santorum. it's almost like a stock market trader. you're buying when you should have been selling, and you are selling when you should have been buying because it looks like santorum is going to lose in ohio also. what are you thinking? why did you do this? >> he is not going to lose ohio. you're looking at 1,000 people behind me at this rally tonight for santorum. he had a huge crowd this morning in southern ohio. there's a tremendous amount of energy. you know, this so-called romney machine is nothing more than a lot of money. now, money is important. i admit that. the only reason that you're seeing the close in the polls is because romney is on the attack with negative commercials,
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negative radio and these craziy robocalls. what rick santorum has is people like him. he has tremendous strength. he has people knocking on doors today. he has people making phone calls. a lot more energy with the santorum campaign than with the romney camp. there's nobody enthusiastic in the state about romney. absolutely nobody. >> let's go to the issues here because one thing that came out of michigan, mike, is that economic issues and fiscal issues trumped cultural issues, and that hurt rick santorum. i mean, you probably know these numbers, but in michigan the biggest issue, 55%, the economy. okay? romney beats santorum by 18 points. the second biggest issue, the deficit. romney beats santorum on that by 18 points. are you worried, mike deswine wine as a lot of republicans are worried that it is the economy that's the issue, and that rick santorum is missing that point? >> rick is not missing that
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point. it may be being reported that way, but i will tell you, i have watched every single speech that he has given in the state of ohio for the last several weeks. every one he is talking about manufacturing. he is talking about a very bold energy policy. he is talking about jobs and jobs and jobs. always the important issue in ohio. now, the culture issue is always important. the third thing that's important that i think sometimes we miss is what i call just simply likability. people like rick santorum. they think he has activision. there is no enthusiasm out there for governor romney at all. i mean, he continues to make these mistakes on the campaign trail, which makes it more difficult for romney to relate to the average person. i will tell you that in the fall when santorum is the nominee, he is going to run a lot stronger in ohio than mitt romney would be if he was a nominee because rick is appealing to what the
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people we used to call as the reagan democrats, the blue collar workers. romney cannot appeal to them. he just is not. it's not working for him. >> i think that that's rick santorum's biggest trump card, and i think that's very fair, nor, or attorney general, whichever you prefer. you think the blue collar reach-out is very important. i know you think romney is not getting the interest, but he is surging in the polls, mike. i give you the last word briefly. if it's not happening, why is his polling going up in ohio? >> i think, look, it's the same thing that romney does in every state, and he gets all this money and tries to blast the other guy away. that's why the polls are narrowing. it was always clear that no one was going to run away with ohio. ohio is going to be a close state. it's going to go right down to the wire, but rick is going to win. he is going to win because the one ingredient in politics that is so very important is energy, is determination from the people
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who are out there supporting you, and romney doesn't have it. i'm sorry. he just doesn't have it. >> senator, you're the guy. all i know is what you can tell me. senator mike dewine, current attorney general. we appreciate your time very much, sir. all right, folks. let's go on. a bunch of washington beltway pundits are saying that the better economy necessarily means president obama has already won the election. unfortunately, i totally disagree. totally disagree. i think we're going to take a break and then come back with former dnc chairman howard dean. we have former rnc chairman michael steel. they're going to debate whether the election is already over or not. i'm kudlow. please stay with us. it ain't over, folks. hint, hint. my job is to find the next big sound. they sound awesome tonight.
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former republican national committee steel. off the top, michael steel, if this election is over, why are the polls so close? you look at the national polls. obama is running about four points ahead. president obama is still below that 50% threshold which you have taught me is so important in terms of calling a race. how can these guys call it a race over just because we've had a couple of months of better economics? >> i think that counting those chickens way too soon before they hatch, and i think the reality of it is there's still a whole lot more that has not been answered about this economy that will begin to come into play. you know, how are the jobless numbers? what about the seven million or so americans that have stopped work and are still part of this conversation, but they're kind of on the sirdlines right now? then, of course, we have the whole european card that has to be played and the economic
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trevail that is are happening over there. there are a lot of components that i think the obama administration will definitely have to address, you know, once we get a republican nominee, and that becomes much more of a one-on-one conversation. to go out and say this is over, it's too much wompa being smoked there. howard dean, i'm glad the economy is getting better. i've been calling for the economy to get better. i'm watching the numbers, like a lot of people. i say great, god bless, free enterprise, but you have a clash of values, howard. this is where i'm going. it's not about just some economic stats. have you high tacks, low taxes, and debt and entitlement and taxing the rich versus opportunity. in other words, those value issues and others are going to play a big role. not just the economic stats. >> i agree with that, and i agree with michael that the election is not over, and it certainly isn't over because the economy is getting better. the problem is it may be over
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because of the social values. the republicans are looking like they're actually unfit to serve. 82% of women in america of child bearing age has used birth control at some point. the republicans look like they're crazy. limbaugh, who is basically a spokesman for the republican party -- i know they wish that wasn't so, but it's true -- calling a woman a slut because she -- her insurance company pays for birth control pills? wait until you see the next poll that shows where women are. women were for romney for the most part three months ago. i'll bet you the next poll shows obama at least ten points up among women. you cannot survive an election as a republican when you alienate all the immigrants, all the women, minorities, muslims, and gays. i mean, this country is a pretty diverse country. i have never seen in my lifetime a party destruct, self-destruct more than this party has in the last couple of months -- couple of few days. >> i have to suggest a challenge here. mike steel, do radio talk show hosts speak for the republican
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candidates? is howard taking this a little too far maybe because he wants to? >> well -- >> in the eyes of the public they do. >> i think -- to his point, i think there is a degree of non-separation there where people do kind of align certain personalities, you know, with the party, but i think more broadly speak, no, rush and others do not speak for boehner or mcconnell or the president or our governors. there is a leadership out there that are out -- that are out there every day, as you know, larry, that are trying to build the economies within their state, despite the efforts of this administration with respect to those same value choices that you started this segment with. so i think that there's a lot of hype and overplay, but to the point that the governor is just making, rush doesn't make it easy for those individuals i just mentioned to do what they need to do to talk about the
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economy when he is framing a different argument. >> here's the problem, michael. it's not just rush. robert mcdonald, the governor of virginia, who was previously considered to be a vice presidential candidate was pushing a bill that would penetrate women with an instrument in the hands of a physician if they wanted to have an abortion. this is crazy stuff. women around the country are looking at this and going, what? >> the governor was not pushing that bill. >> he was pushing the bill until he found out it was a big backlash for it. >> once they did, they did their due diligence on it, the governors back off of that. i understand that. >> that's within the brand of the republican party. they're social extremists. >> the point is i got to challenge you, howard dean, i happen to think mitt romney is probably going to be the nominee, but maybe not zoosh i agree. >> let's take your point. better from you than from me. romney will determine policy, not rush limbaugh or somebody else. in other words, the evening that romney speaks as the nominee at the republican convention, that
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evening, the whole world will be watching for the first time. if it's romney, okay, but let's assume it is. in tampa that night he will give a primetime speech and he will define himself and let everybody look at it. i don't think anybody else, whether it's rush or anybody who may have a misspeaking is going to define him but himself. i'll give you the last word. that's the way this game works. that night at the convention, howard. >> i think that is true in one sense. he will if he is the nominee begin to unite the party, but he has said so many things. he has not shown the backbone to stabbed up to the extreme right, and people assume he will cater to them. i think it's fatal for the republicans. i think you've screwed yourself out of the presidency. >> all right. we will see. we will see. >> gloom and doom. >> too much gloom and doom. one thing we all agree on, the race is not over. that's -- >> it's not over. >> that's just sillyness. thank you, howard dean. thank you, michael steel. you're both great to come on
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"kudlow." the president said to address the pro-israel group before a crucial meeting with prime minister netanyahu. can the president convince netanyahu? [ leanne ] appliance park has been here since the early 50s. my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door,
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it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i came to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪
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sflimplts welcome back to the kudlow report. just before this weekend's address to the pro-israel lobbying group, apex, and a crucial meeting with benjamin netanyahu, the president says he is not afraid to use military opings against iran. i quote, as president of the united states, i don't bluff. this from an interview with one
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of our next guests, that being jeffrey goldberg of "the atlantic." so what is u.s. policy towards israel and iran? here now with jeffrey goldberg, national correspondent for "the atlantic" and peter brooks, heritage foundation, senior fellow, and a former deputy assistant secretary of defense. how do you read it? >> the second is the israel government. he is telling the iranians take my desire to see you stop developing nuclear weapons seriously, or else there will be consequences, including as he put it a military component to the consequences. to the israelis, he is saying i'm taking the iranian threat seriously enough that you don't have to go do anything precipitous or premature. he is signalling to different parties in different ways. >> peter brooks, is the president upping his rhetoric, sharpening his rhetoric, but in
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your opinion does that change our policy? >> i don't know what our policy is, larry. i mean, we've had this sort of diplomacy, some economic sanctions, but the fact of the matter is the iranians are making tremendous progress on their nuclear program and this issue is coming to a head. we're going to have a crisis. the president certainly doesn't want one, but i think he needs to put politics aside, especially election year politics and get down to a real solid policy for dealing with a submerging threat that we have in iran. >> i mean, jeff goldberg, let me ask you, is some of this stronger rhetoric -- i know the apec meeting is coming up, the netanyahu meeting is coming up. there's a lot of dpesic politics, but this is the high stage of international politics as well. this is very serious business. first of all, do you think he can reassure netanyahu that mr. obama and the united states has israel's back, that they will really defend israel. that it's not about israel. it's about iran. >> imat an sure.
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i'm not sure. this is going to be their ninth meeting as prime minister and president. it's certainly the most consequential of their meetings. it might be one of the more consequential meetings barack obama is going to have, and it's not at all clear to me that he is going to be able to make that case. remember, netanyahu, by disposition, by ideology is deeply committed to the idea that israel should handle its own national security tletsz. he does not want to subcontract this out to a president. he is not entirely sure will do what he thinks needs to be done. so it's an open question. these guys are going to be trying to convince each other pretty hard of their respective positions, and i don't know if there's a great chance for a true meeting of the minds. >> peter brooks, i want to get your take on that. a chance for meeting of the minds. i want to ask you, are you looking, peter, for any evidence from president obama that he would lean harder into a military option with iran. the strait of hormuz could be choked off.
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oil prices stand at the edge of another major break-out. are we going to lean harder, or is this just going to be political -- >> we're going to find out by sunday and certainly by monday, larry. we have heard some tougher talk coming out of the pentagon just yesterday. the president is starting to get out in front of this. i'm hearing stories that staff -- the israeli staff and american staff are getting together. we still don't know when the united states says a nuclear weapon or when the obama administration says a nuclear weapon is unacceptable, an iranian nuclear weapon is unacceptable. what does that mean? does that mean when they finally put the bomb together? does that mean when they've gotten the ability to enrich to 90% uranium which would allow them to develop a bomb? we need to know more about this. this issue is coming to a crisis. i think the president has to lean much more further forward in his stir up on this issue, and i would be great if we could have the israelis and the americans have a meeting of the minds on how we move forward on this, because if the israelis move forward without us, we're certainly going to be involved
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in some way or another. >> jeffrey, in your interview with the president, did he hint that there are intelligent sources in the u.s. government that still don't believe that iran is building a nuclear bomb? i mean, i continue to read this. i'm baffled by it. did he say anything about that? is he convinced iran is building a bomb? >> well, i mean, the official position of both the israeli intelligence and american intelligence is that iran has not yet decided to go to nuclear break-out, to actually construct a bomb or to pull together this weapon, but i don't think -- it was assumed in our conversation and i think it's assumed in everything he says publicly that iran seeks a nuclear weapon, and is developing a program that would allow it to move toward weaponization very, very quickly. i think there are people in this country and there are people elsewhere who are casting doubt on whether iran is seeking weapons capability at all. i don't think he is in that camp at all. >> all right. he is not in that camp. that's good to hear. peter brooks, let me go back to you. do you think it's possible the united states would strike iran
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first? in other words, the president as i was reading jeffrey goldberg's article or parts of it, might the u.s. go first? if iran makes any move in the strait of hormuz, might the united states use military actions down there to take out the revolutionary guard? the barracks are above ground. the buildings are above ground. is such a thing possible? >> it's certainly possible. that's not what the president wants at this point. he is preaching patience to the israelis and to the american people that he thinks that sanctions will change, make iran, tehran change course on its nuclear program. i don't see any evidence of that. unfortunately, iran keeps moving forward and talking about, you know, time killing talks. of course, if iran undertakes some sort of hostilities towards the united states or our interests overseas, something could happen. that's the problem. the chance for miscalculation and misperception is very high, and that's why the president has to be very firm, has to show revolve -- resolve and talk tough and let the iranians know that we're not fooling around here, and if they do something
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untoward towards us, that the things could get very, very bad, very, very quickly. >> jeff goldberg, i'll give you the last word on this. can israel aforward to wait for the sanctions to work in the sense of undermining iran's economy and government? can israel wait for the sanctions, jeff? >> look, i mean, what we need here is a little bit of analytical humility. we don't know all of israel's capabilities, and we don't know how far deep in the ground some of iran's capabilities are. that said, it seems to me that there's still a little bit of time for israel to deal with it militarily, and there's a lot of time for america to deal with it militarily. >> and if israel deals with it militarily, jeffrey, what was your sense? will the president simply back israel, period, end of sentence? >> i would imagine that privately he would be -- he would have a lot of consternation. i don't think publicly he would do anything but come to israel's aid if it was under missile attack from iran or hezbollah, and i don't envision a deep
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rupture between israel and the u.s. on this question right now, but these things can change pretty rapidly. >> all right, jeffrey goldberg, "the atlantic" peter brooks, the heritage foundation. thank you, gentlemen. >> thank you. >> thank you. >> all right. that's it for tonight's show. thanks for watching. it really sounds like there's going to be a military solution to the iranian problem. that's what i heard from both of our guest experts. i'm larry kudlow. we'll be back on monday. thanks for watching. [ male announcer ] if you believe the mayan calendar, on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire, td ameritrade's investment consultants
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The Kudlow Report
CNBC March 2, 2012 7:00pm-8:00pm EST

News/Business. Larry Kudlow. Economic news and interviews. New.

TOPIC FREQUENCY Santorum 16, Israel 15, Iran 12, Obama 9, U.s. 8, Us 7, Ohio 7, Michigan 6, Rick Santorum 6, Peter Brooks 5, Dan 5, S&p 5, United States 4, Dave 4, Howard Dean 4, Netanyahu 4, Gingrich 4, Jeffrey Goldberg 4, Kudlow 4, Jim 4
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on 3/3/2012